What Happened
- The cities of Ahmedabad, Surat, and Hyderabad moved to operational readiness for electric bus deployment under the PM E-DRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme, following the award of bids to PMI Electro, EKA Mobility, and Olectra respectively.
- A total of ₹4,391 crore has been allocated for the deployment of 14,028 e-buses across nine major Indian cities with populations exceeding 40 lakh under the PM E-DRIVE scheme.
- The demand aggregation for bus procurement is handled by CESL (Convergence Energy Services Limited), a government-owned company under the Ministry of Power, through a Gross Cost Contracting (GCC) model — where the private operator procures, supplies, operates, and maintains the buses.
- The nine targeted cities are Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, and Pune. Bengaluru received the largest allocation at approximately 4,500 buses.
- The PM E-DRIVE scheme was approved with a total outlay of ₹10,900 crore over two years; the e-bus component (₹4,391 crore) is alongside a ₹2,000 crore allocation for public EV charging infrastructure.
- The Ministry of Heavy Industries extended the scheme's tenure in early 2026 from March 31, 2026, to March 31, 2028, to accommodate implementation timelines.
Static Topic Bridges
PM E-DRIVE Scheme — Architecture and Objectives
PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) is a centrally funded scheme approved by the Cabinet in September 2024 under the Ministry of Heavy Industries, with a total outlay of ₹10,900 crore over two years. It replaces the earlier FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme and represents the government's updated EV promotion framework. Unlike FAME, which offered demand-side subsidies directly to buyers, PM E-DRIVE channels support through institutional procurement (e-buses for state transport undertakings) and public charging infrastructure development.
- Total outlay: ₹10,900 crore (FY25 to FY28 after tenure extension)
- E-bus component: ₹4,391 crore for 14,028 buses across 9 cities
- EV charging infrastructure: ₹2,000 crore for public chargers (2-wheelers, 3-wheelers, trucks)
- Implementing agency: Ministry of Heavy Industries; demand aggregator: CESL
- Successor to FAME-II scheme (which ended in March 2024)
Connection to this news: The Ahmedabad, Surat, and Hyderabad deployments are milestones in PM E-DRIVE's implementation, with bid awards translating the scheme's ₹4,391 crore e-bus allocation from policy to procurement reality.
CESL and the Gross Cost Contracting Model
Convergence Energy Services Limited (CESL) is a government enterprise under the Ministry of Power that serves as the demand aggregator and procurement agency for large-scale EV deployment. Under the Gross Cost Contracting (GCC) model used for e-bus procurement, the winning bidder is responsible for supplying the buses, operating them on assigned routes, maintaining them over the contract period (typically 10-12 years), and developing associated charging infrastructure. The city's State Transport Undertaking (STU) defines the routes and oversees operations but does not own or maintain the fleet.
- GCC model transfers operational risk and capital expenditure to private operators
- Bus operators are paid a fixed rate per km driven (gross cost), regardless of fare revenue
- CESL aggregates demand across multiple cities to achieve economies of scale in procurement
- The model has been used successfully for e-buses in cities like Pune and Bengaluru in earlier pilots
Connection to this news: The bid awards to PMI Electro (Ahmedabad), EKA Mobility (Surat), and Olectra (Hyderabad) are GCC contracts — where the winners will finance, operate, and maintain the bus fleet, receiving per-km payments from the respective STUs.
Urban Public Transport and EV Transition
India's urban public transport faces a dual challenge: meeting rapidly growing demand in fast-urbanizing cities while transitioning away from diesel-powered fleets that are major contributors to urban air pollution. Electric buses offer significantly lower operational costs (electricity vs. diesel), zero tailpipe emissions, and smoother rides, but require higher upfront capital and dedicated charging infrastructure. The PM E-DRIVE scheme addresses the capital cost gap through public subsidy while using the GCC model to bring in private operational expertise.
- India has approximately 150,000 city buses — among the lowest per capita ratios for a major economy
- Electric bus operational cost per km is approximately 40-50% lower than diesel buses
- India's urban population is expected to grow by 400 million between 2020 and 2050
- National Urban Transport Policy (2006) and Smart Cities Mission both emphasize modal shift to public transport
Connection to this news: The deployment of e-buses in Ahmedabad, Surat, and Hyderabad directly expands clean public transport capacity in rapidly growing cities — reducing both emissions and pressure on private vehicle infrastructure.
Make in India and the EV Manufacturing Ecosystem
The PM E-DRIVE scheme includes domestic value addition requirements, requiring that vehicles procured under the scheme meet specified Phased Manufacturing Programme (PMP) targets. This links e-bus procurement directly to India's broader Make in India agenda, incentivizing Indian EV manufacturers to develop local supply chains for batteries, motors, and electronics. PMI Electro, EKA Mobility, and Olectra are all Indian manufacturers, reflecting the emergence of a domestic e-bus industry.
- EKA Mobility (part of Pinnacle Industries) manufactures e-buses in Pune with high local content
- Olectra Greentech manufactures electric buses in Hyderabad in partnership with BYD (China) for battery technology
- PMI Electro Mobility Solutions manufactures in Faridabad, Haryana
- Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries complements PM E-DRIVE to build domestic battery manufacturing
Connection to this news: The three winning bidders being Indian companies (with varying degrees of domestic content) signals progress toward a self-sufficient EV manufacturing base — a prerequisite for sustainable long-term EV transition without import dependency.
Key Facts & Data
- PM E-DRIVE total outlay: ₹10,900 crore; e-bus allocation: ₹4,391 crore
- Total e-buses: 14,028 across 9 cities with 40+ lakh population
- Nine cities: Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, Pune
- Bengaluru: largest allocation at ~4,500 buses; Ahmedabad: ~1,000; Surat: ~600; Hyderabad: ~2,000
- Procurement model: Gross Cost Contracting via CESL
- Bid winners: PMI Electro (Ahmedabad), EKA Mobility (Surat), Olectra (Hyderabad)
- Scheme tenure extended to March 31, 2028 (from March 31, 2026)
- EV charging infrastructure allocation under PM E-DRIVE: ₹2,000 crore
- Predecessor scheme: FAME-II (ended March 2024)